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Updates to Quality Assurance Fee and 340B Drug Discount ... · summaries, by plan • June volume...
Transcript of Updates to Quality Assurance Fee and 340B Drug Discount ... · summaries, by plan • June volume...
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Updates to Quality Assurance Fee and 340B Drug Discount Pricing Program
Amber OttCalifornia Hospital Association
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Agenda
Hospital Fee Program• Background• Medicaid Managed Care Final Rules• Implementation Timeline• Encounter Data Files• Network Providers340B Drug Discount Program• State Updates• Federal Updates
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Hospital Fee Program -Background
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• The state Department of Health Care Services (DHCS) administers the Medi-Cal program and pays hospitals directly for fee-for-service enrollees. DHCS also makes monthly capitation payments to Medi-Cal managed care plans based on how many members they enroll.
• A number of supplemental payment programs also exist: Disproportionate Share
Hospital Fund Private Hospital Supplemental
Fund Trauma Fund Other
Despite the array of payments from multiple sources, hospitals are left with massive losses from treating Medi-Cal patients.
Losses for Private Hospitals total about $8
billion a year
Why did CHA Develop the Hospital Fee Program?
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Losses incurred by Private Hospitals
$4 billion Hospitals
pay to DHCS
TO FILL THE $8 BILLION GAP
Hospitals Pay $4 billion
The State Keeps -$1 billion (24%) of net benefit
Remaining Funds $3 billion+
Federal Funds $5 billion
Total Funds $8 billion
This fills the $8 billion gap and maximizes the federal contribution…
Amounts are rounded and estimated to simplify equation – actual funding varies.
Basic Funding of the Hospital Fee Program
$5 billion Federal
govt. (CMS) sends a
matching contribution
to DHCS
$8 billion a year
Reimbursement Shortfall For
Medi-Cal Services
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SB 239 Hospital Protections:• State share cannot exceed 24% of net benefit• DHCS fee-for-service Medi-Cal payments to hospitals
cannot be reduced• All Federal Medicaid funds available must be drawn
down• Construct is preserved for the future• Creates “program periods” (period one: 1/1/14 thru
12/31/16, period 2: 1/1/17 thru 6/30/19)• Program ends if Federal funds no longer available• 100% of supplemental managed care funds must go
to hospital services• The program “sunsets” 12-31-17
SB 239: Hospital Fee Program Statute
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Prop 52 was developed to “protect the protections” by repealing the sunset date – leaves all other protections in place with further protection by the California Constitution
Proposition 52: Medi-Cal Funding and Accountability Act
A Legislature cannot tie the hands of a future Legislature
These “protections” were only good until the next Legislative Session
This puts hospitals and patients at risk for shenanigans!
Prop 52 was passed by a vote of the people in November 2016. Makes the current construct of the hospital fee program “permanent”
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$4 billion in supplemental Medi-Cal fee-for-service payments are increased to hospitals for:
• Inpatient Services• Including General Acute, Subacute, High
Acuity and Psychiatric Days• Outpatient Services
$4 billion in increased capitation payments to managed care plans for supplemental “pass-through” payments to hospitals in lump sums based on prior known inpatient and outpatient utilization.
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New federal rules require changes to these payments to
hospitals
Hospital Fee Program Payments
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Medicaid Managed Care Final Rules
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Medicaid Managed Care Final Rules
• Pass-through payments must be phased out over 10 years beginning on July 1, 2017
• Imposes an annual cap on pass-through payments equal to the aggregate pass-through payment amount submitted to CMS as of July 5, 2016 Approximately $2 billion in California
• Remaining supplemental Medi-Cal managed care payments must be made through a new permissible methodology (e.g. Directed Payments)
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Medicaid Managed Care Final Rules(cont.)
• Per SB 239, 100% of supplemental Medi-Cal managed care payments must be spent on hospital services
• Risk losing $2 billion in supplemental directed payments if cannot guarantee all $2 billion goes toward hospital service
• CHA worked with CMS and DHCS to find a solution that complied with the new Federal rules and ensured that 100% of supplemental payments will go to hospitals
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$2 billion new “directed payment”
method
$2 billion current “pass-through”
method
$4 Billion Managed Care Payments Directed Payments
• Uniform add-on per inpatient day and outpatient visit
• Network Providers for Contracted Services
• Current Utilization Data• Only Paid/Partially Paid
Claims
Pass-Through Payments• Uniform add-on per inpatient
day and outpatient visit• No requirement to be a
Network Provider• Historic Utilization Data• All Claims
Medicaid Managed Care Final Rules(cont.)
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Medicaid Managed Care Final Rules(cont.)
$2 billion new “directed payment”
method
$2 billion current “pass-through”
method
$4 Billion Managed Care Payments
Pass-through payments must be phased out over 10
years
Directed payments will grow over 10
years
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Implementation Timeline
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Two Year Federal Claiming Limit
• Per Section 1132 of the Social Security Act, states must file for federal matching funds within 2 years of the calendar quarter in which the expenditure was made
• Supplemental Medi-Cal managed care payments for SFY 17/18 must be paid to the health plans by September 30, 2019
• Failure to comply results in forfeiture
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Pass-Through Payments
1/1/17 – 6/30/17 Rate Package• DHCS plans to submit to CMS by end of June 2018• Supplemental capitation payments to plans scheduled by
March 31, 2019• Supplemental Medi-Cal Managed Care payments made to
hospitals in May 2019
7/1/17 – 6/30/18 Rate Package• DHCS plans to submit to CMS by end of June 2018• Supplemental capitation payments to plans scheduled by
September 30, 2019• Supplemental Medi-Cal Managed Care payments made to
hospitals in November 2019
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Directed Payments
ACTIVITY Q1 CY2018 Q2 CY2018 Q3 CY2018 Q4 CY2018 Q1 CY2019 Q2 CY2019 Q3 CY2019 Q4 CY2019Volume Charts - 1st Release(Time Period Jul’17-Dec’17)
June 2018
Submit Initial SFY 17/18 Managed Care Rates to CMS
July 2018
Volume Charts - 2nd Release
(Time Period Jul’17-Mar’18)September 2018
Deadline for SFY 17/18 Claim Submission to Health
Plans
Exact Due Dates are Plan Specific
Deadline for Health Plans to Submit SFY 17/18
Encounter Data to DHCS
December 2018
Final Encounter Data Pull for Payment Calculation
March 2019
Submit Updated SFY 17/18 Managed Care Rates to CMS
June 2019
CMS Approves Updated SFY 17/18 Managed Care Rates
August 2019
Health Plans Receive Supplemental Capitation
PaymentsSeptember 2019
Hospitals Receive Supplemental Medi-Cal
Managed Care Payments
November 2019
* Estimates and subject to change. All activity estimated to occur by end of month.
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Encounter Data Files
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Encounter Data Files
• Hospitals submit claim data to health plans and other payers using the 837 transaction format
• Medi-Cal managed care plans transmit the 837 encounter data for paid claims to DHCS on a daily, weekly or monthly basis
• DHCS accepts or rejects each claim based on Medi-Cal eligibility and data completeness
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DHCS Encounter Data Flow
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Encounter Data Files
• CMS requires encounter data files be used to calculate directed payment amounts
• DHCS will distribute hospital-specific volume summaries, by plan• June volume summaries cover 7/1/17 –
12/31/17• September volume summaries cover 7/1/17 –
3/30/18
• Hospitals are encouraged to compare volume summaries with internal utilization data
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Encounter Data Files (cont.)
Volume summaries created using hospital reported National Provider Identifiers (NPIs)https://app.smartsheet.com/b/publish?EQBCT=425fbe695a4749c2a883616707292acd
Inpatient • General Acute Care• Acute Rehab Units• Acute Psych Units
Outpatient• Outpatient Department• Hospital Based Outpatient Clinics
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Counting Logic
Inpatient
• Days = Discharge Date - Admit Date
• If Discharge Date = Admit Date, 1 day counted
• Excludes Long Term Care Days
Emergency Room
• Not resulting in an inpatient admission
• 1 visit = Unique Client Index Number (CIN), Date of Service, (NPI)
Outpatient
• 1 visit = Unique CIN, Date of Service, NPI
• Excludes Rural Health Clinics, Federally Qualified Health Centers and Cost- Based Reimbursement Clinics
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Row Labels S01_IP S02_ER S03_OP S04_OT Grand TotalHospital A 848 787 209 566 2410
1639123456 812 475 189 560 2036304 615 272 119 421 1427305 3 1 24 28306 2 7 20 29352 174 187 59 94 514360 23 11 3 1 38
1895123456 11 6 17304 11 6 17
1942123456 36 312 9 357304 30 189 6 225306 4 0 4352 6 119 3 128
Grand Total 848 787 209 566 2410
Hospital A Volume (7/1/17 - 12/31/17)
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Volume Summaries
Unique NPI’s
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Row Labels S01_IP S02_ER S03_OP S04_OT Grand TotalHospital A 848 787 209 566 2410
1639123456 812 475 189 560 2036304 615 272 119 421 1427305 3 1 24 28306 2 7 20 29352 174 187 59 94 514360 23 11 3 1 38
1895123456 11 6 17304 11 6 17
1942123456 36 312 9 357304 30 189 6 225306 4 0 4352 6 119 3 128
Grand Total 848 787 209 566 2410
Hospital A Volume (7/1/17 - 12/31/17)
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Volume Summaries (cont.)
Plan Codes(crosswalk included)
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Row Labels S01_IP S02_ER S03_OP S04_OT Grand TotalHospital A 848 787 209 566 2410
1639123456 812 475 189 560 2036304 615 272 119 421 1427305 3 1 24 28306 2 7 20 29352 174 187 59 94 514360 23 11 3 1 38
1895123456 11 6 17304 11 6 17
1942123456 36 312 9 357304 30 189 6 225306 4 0 4352 6 119 3 128
Grand Total 848 787 209 566 2410
Hospital A Volume (7/1/17 - 12/31/17)
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Volume Summaries (cont.)
Inpatient, Emergency Room
And Outpatient (Eligible for directed
payments if in-network)
Other(Not eligible for
directed payments)
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Volume Summaries (cont.)
• Volume summaries grouped by primary Medi-Cal Managed Care Plan Example: If LA Care delegates a population to
Anthem and the hospital has a contract with Anthem, the utilization will be listed under LA Care as the primary plan in the volume summary, not Anthem
• Volume summaries will be shared using an SFTP site and only the primary contact person listed with DHCS will be sent the log-in details
• Volume summaries will include a tab with claim-level details
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Troubleshooting Volume Summaries
Hospitals are encouraged to work with Medi-Cal managed care plans to address significant variations in volumes summaries
Examples leading to variations in volume:• Missing or Incorrect NPI(s)• Capitated volume not submitted• Pending state eligibility response• Pending as duplicate claim• Fully or partially denied claim• Full dual-eligible claims should be excluded• Third party vendor or clearing house delays in
reporting
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Network Providers
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Contracted Service Definitions
Directed payments can only be made to network providers for contracted services
A contracted service must meet the following criteria:
• A Medi-Cal covered service• Rendered to a Medi-Cal member actively
enrolled in a Medi-Cal managed care plan• By a “network provider” of the Medi-Cal
managed care plan who is contracted: To provide the rendered service To the member receiving the service For the applicable dates of service
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Network Provider Definitions
• A service qualifies for a directed payment only if there is an unbroken “contracting path” for the dates of service between the Medi-Cal managed care plan and the hospital for the particular service rendered and the member receiving the service
• Services provided under a patient specific Letter of Agreement (LOA) or Memorandum of Understanding (MOU) are not considered “contracted”
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Network Provider Database
• DHCS must create a database that captures all network providers
• Medi-Cal managed care plans and hospitals will be required to provide information to DHCS
• Completion goal for final database-February, 2019
• Database to be updated on a monthly basis
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Contracting Scenarios
Direct Contracts• Between hospital and
primary Medi-Cal Managed Care Plan
• Population and Services under contract
• Capitated or Fee-for-Service
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Contracting Scenarios (cont.)
Delegated Contracts• Between hospital and
delegated Medi-Cal Managed Care Plan
• Population and Services under contract
• Capitated or Fee-for-Service
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Contracting Scenarios (cont.)
Hospital to Hospital Contracts• Between hospital and
another hospital• Population and Services
under contract• Capitated or Fee-for-
Service
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Contracting Example #1
Scenario• Hospital A has a full-risk capitation
agreement with a Health Plan to care for a specific population
• Hospital A also has a contract with Hospital B to provide quaternary care to this population when the service is not available at Hospital A
• Hospital B receives payment directly from Hospital A for treating this population
Q: If Hospital B is not contracted with the Health Plan, are they considered to be a network provider when providing quaternary services for this population? A: Yes, for the specific population and for quaternary services.
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Contracting Example #2
Scenario• Hospital A and Hospital B each have
capitation arrangements with a Health Plan for unique populations.
• Hospital A and Hospital B have a reciprocity agreement with each other that outlines how they will pay one another if one of their capitated members is treated by the other hospital.
Q: Would Hospital A be considered a network provider when they treat one of Hospital B's capitated members? A: Yes, a reciprocity agreement constitutes a contract.
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Contracting Example #3
Scenario• Hospital has a contract with an
Independent Physicians Association (IPA) to provide ancillary services.
• A patient from the IPA presents to the hospital's emergency room and is ultimately admitted as an inpatient for treatment
Q: Is the Hospital considered a network provider for the inpatient admission?
A: No for inpatient services; Yes for ancillary services.
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Contracting Example #4
Scenario• Hospital A has a contract with
Delegated Entity A to treat their patient population with a Health Plan.
• Hospital A does not have a contract with Delegated Entity B to treat their population with the Health Plan.
Q: Is Hospital A considered a network provider when they treat members of Delegated Entity B?
A: No, Hospital A is only contracted for Delegated Entity A’s population.
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340B Drug Discount Program
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340B Drug Discount Program
Overview ● Provides financial relief from high prescription costs to certain safety net hospitals
● Requires drug manufacturers participating in Medicaid to sell outpatient drugs at discounted rates to healthcare organizations that care for a significant number of uninsured and low-income patients
● Allows hospitals to provide free or discounted drugs to low-income patients and expand health services
● Program has undergone significant changes and remains threatened
There are 175 340B hospitals across 1,828 sites in CA
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California’s Budget Proposal
Governor Brown’s 2018 Budget included a proposal to prohibit 340B drugs from being dispensed to Medi-Cal managed care and fee-for-service beneficiaries, regardless of the environment (hospital, clinic, contract pharmacy, etc.)
Why?
● Ensure compliance with federal program standards; guarantee no duplication of discounts
● DHCS can claim additional rebates directly from the drug manufacturers
● Administratively burdensome to manage
Advocacy Efforts
● Met with key members of the Legislature and Governor’s office
● Testified at Assembly and Senate budget sub-committee hearings
● Held 340B advocacy day at the Capitol, including press event
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California’s Budget Proposal
Outcome
● Senate and Assembly budget sub-committees rejected the proposal
● Legislature instructed DHCS and stakeholders to find a solution that addresses the Administration’s concerns related to duplicate discounts
● Legislature must send final budget to Governor by June 15 and Governor must sign by July 1
Next Steps
● CHA and other stakeholder groups will continue to meet with DHCS to explore solutions
● Contract pharmacy environment continues to be a challenge – continue research and outreach to national partners
● Likely that a statutory change needed to ensure compliance with federal requirements
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340B Federal Activity
CHA opposes H.R. 4710 – 340B PAUSE Act● 2 year moratorium on new 340B DSH hospitals and new child sites for current
DSH hospitals (CAHs, SCH, RRCs are exempted)
● New reporting requirements for DSH, children’s and freestanding cancer hospitals
● Uses charity care defined by S-10 and not community benefit
CHA supports H.R. 4392● Nullifies Medicare payment cuts for drugs purchased through the 340B program
CHA supports H.R. 6071 – SERV Communities Act ● Nullifies Medicare payment cuts for drugs purchased through the 340B program
and improves transparency by requiring drug manufacturers to publish ceiling prices.
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Questions?
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Thank you
Amber OttVice President, Strategic Financing InitiativesCalifornia Hospital [email protected]
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